#1Company Presentation LUPATECH 列 O#2Disclaimer Forward Looking Statements This document may contain prospective statements. which are subject to risks and uncertainties. as they were based on expectations of the Company's management and on available information. These prospects include statements concerning our management's current intentions or expectations about a list of subjects. out of which we highlight: economic. politic and business environment in Brazil. with special attention to the geographic market in which we work with; our level of indebtedness and remaining financial obligations and our capacity to take out financing when necessary and at reasonable terms; our capacity to implement our investment plans; inflation and devaluation of the Real. as well as interest rate fluctuations; existing laws and regulations and futures; cost increase; our capacity to obtain materials and uninterrupted services from our suppliers. at reasonable prices and with economies of scale; our ability to get new clients and integrate them in a satisfactory manner; growth prospects of the oil. gas and automobile industries. including our expectations about the business plan for our clients; prospects that our clients might continue to demand a minimum participation of the national content in their biddings; success in the implementation of our strategy; and the risk factors related to our businesses. Readers/investors should be aware that the above-mentioned factors. as well as others discussed herein. may mean that our future results differ from the forward-looking statements in this document. The Company has no obligation to update said statements. The words "anticipate", "wish", "expect", "foresee", "intend", "plan", "predict", "forecast", "aim" and similar words. are intended to identify affirmations. Forward-looking statements refer to future events which may or may not occur. Our future financial situation. operating results. market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside the company's control or expectation. The reader/investor is encouraged not to completely rely on the information above. C LUPATECH#3Company Overview LUPATECH 列 O#4History - timeline 1987 1st Private Equity round CRP 1995 2nd Private Equity round Bozano Simonsen Advent 2003 GP Invest. 2005 2006 2007 2008 2009 3rd Private Equity round BNDES 4th Private Equity round Axxon Group IPO (May, 15) Perpetual Bonds Perpetual Bonds (retap) Convertible Debentures Debentures Capex Lines (BNDES) 1980 1984 1995 2000 Foundation with Microinox creation Valmicro creation Steelinject creation MNA acquisition 2005 Mipel Sul - Casting (Carbonox) acquisition 2006 Mipel SP, Itasa, Worcester, Esferomatic acquisitions and Mipel Sul creation 2007 CSL, Oil Tools, Oil & Gas and Tubular Services, Jefferson, ASPRO (50%) acquisitions 2008 Monitoring Systems, Fiberware, 2009 2010 Lupatech Tubular Oilfield Services - Services Tecval, Pojuca Norpatagonica Vicinay Marine (6,77%) acquisitions, Sinergás (50%) LUPATECH#5International Presence Plants and Offices Manufactured Products 16 04 Services 40 07 01 01 01 01 Presence Exports C ✓ LUPATECH#6Shareholding Position and Governance Shareholding Position 11.5 17.9 25.1 19.2 11.4 15.0 Lupapar Petros BNDES Foreigns Locals Individuals Lupapar Lupatech's Founder & CEO Petros - PBR Pension Fund BNDES-Brazilian Development Bank • General Information Ticker: LUPA3 (BM&FBOVESPA) and LUPAY (OTCQX) • Free float: 70.4% • Total number of shares: 47,737,955 • Novo Mercado listing: common shares only • Active board since 1987: ⚫7 members - 3 independent • Strict disclosure policies . IFRS accounting (since 2008) • Stock option plans: 406,135 Convertibles dilution: • Max: 8,320,000 and min: 5,760,000 LUPA3 NOVO Índice MERCADO Brasil BM&FBOVESPA IBRX Índice de Ações com Tag Along Diferenciado ITAG Índice do Setor Industrial INDX Índice de Ações com Governança Corporativa Diferenciada IGC Índice BM&FBOVESPA Small Cap SMLL LUPATECH#7Diversified Oil & Gas Product Portfolio - Solutions and Cross Sell Services Lupatech Products Oilfield Workover Coating Valves Anchoring Ropes Completion Tools Sensors Compressors Verticalization (Liners & Casting) C LUPATECH#8Oilfield Services - Well Intervention Neiva, Melgar and Bogota (Colombia) Overview Intervention in oil wells to increase productivity (Open Hole Logging, Cased Hole Logging, Perforating, Slick Line Services, Coiled Tubing Services, Well Testing, Field Management and Maintenace, Antecipated Production System) • Focus in Latin America: ― Brazil: offshore and onshore ― Colombia: onshore - - Mexico: offshore and onshore • Integrated solutions with wide service portfolio • Experienced management • • Competitive costs Relationship with clients as Petrobras, Ecopetrol, Hocol, Occidental, Petro Minerales C ✓ LUPATECH#9Oil & Gas Services - Workover Macaé - RJ (Brazil) Overview Light Workover installation of equipments (Using drill pipe risers, power tongs and other handling tools for the installation of drilling, tubing and casing pipes, christmas trees, and other subsea equipments) • Focus in Brazil - offshore and onshore services • Large specialization acquired • Cross selling with products and services of other business • Lower cost and delivery time • Local Content • Relationship with clients as Petrobras, Shell, Statoil, Dril Quip and V&M • Potential markets: other oil majors in Brazil and internationalization C LUPATECH#10Tubular Services and Fiberware - Coatings Macaé and Rio das Ostras - RJ, Pojuca - BA (Brazil) Overview Coating and Lining prevention from corrosion and abrasion Lining: protection using fiber glass (liner) to production pipes Coating: protection using powder ink to exploration pipes . • Leader in the coating market • Unique player in Latin America in lining • Chosen by Petrobras to internally protect with lining the pipes to be used in Pre Salt wells • Larger industrial capacity • Local Content . • Partnership with V&M (larger pipes supplier to Petrobras) . • Strong growth in offshore operations (Southeast) • Opportunity to diversify client base with new drilling companies in Brazil C ✓ LUPATECH#11Valves - Oil & Gas and Industrial Overview 1001 Valves to control flow (Ball, gate, globe, check and solenoid valves for pipelines, refineries, platforms, gas compression stations, etc) • Valves from 1 to 54 inches, manual and automated • Oil & Gas and industrial sectors Brazil: Nova Odessa, Iperó, Jacareí - SP, Veranópolis - RS Argentina: Buenos Aires - BA • Wide product portfolio highly customized . • Strong track record and efficient technical assistance • Customization • Local Content and industrial capacity • Relationship with EPCs (engineering, procurement and contraction) and oil majors • Increase presence in global markets C LUPATECH#12Anchoring Ropes São Leopoldo - RS (Brazil) Overview Polyester Ropes to anchor platforms (production platforms in deep and ultra deep waters as Floating Production Systems - FPSO, Semi Submersible and SPAR) • Anchoring of the majority of platforms in Brazil • Global leader • Excellence in technology • Production flow in two lines: lower delivery time • Own and unique testing machine • Local Content and industrial capacity ⚫ Logistics • Strong track record and efficient technical assistance • Relationship with EPCs and oil majors ✓ LUPATECH C#13Compressors GNO Overview Compressors (natural gas compressors used in gas stations, compressors used pipelines, platforms, etc) GNC Aspro • Global leader in the CNG market: more than 2,000 compressors sold in 30 years • Development of process compressors (platforms) • Strong presence in Europe, Middle East, Brasil and Argentina • Knowhow, engineering and technology • Delivery time • Strong track record and efficient technical assistance • Partnership with Cameron (bare compressors) Brazil: Curitiba - PR Argentina: Escobar - BA C ✓ LUPATECH#14Completion Tools Caxias do Sul - RS and Simões Filho - BA (Brazil) Overview Completion Tools (injection of water, CO₂, etc inside wells to increase pressure and maintain production) • Quality, price, delivery time, technical assistance • Local expertise in development engineering • Qualified management with 25 years of experience • Only Brazilian supplier • Streamlined structure - competitiveness . • Local Content and industrial capacity • Cross selling with other business units, specially Lupatech Oilfield Services ✓ LUPATECH C#15Sensors Overview Sensors fiber optic technology (to permanently monitor outflow, pressure and temperature conditions inside oil wells) Us doy • Fiber optic sensors based in the Bragg technology • Used in the oil exploration and production . • Installation, consulting, training and technical assistance • Large growth potential: substitute of electric sensors • Sensibility, resistance, flexibility and reduced size • Ideal to operate in aggressive and potentially dangerous environments • Local Content • Cross selling with completion tools and oilfield services Rio de Janeiro - RJ (Brazil) C LUPATECH#16Verticalization & Metallurgy Brazil: Veranópolis and Caxias do Sul - PR Argentina: Parana - Entre Rios Overview Verticalization casting facilities (casting of components to other business as valves, liners and tools and casting of parts to the automotive chain) . • Lower raw material cost for business units •Steel: scrap from other industries • Only casting facility in Latin America for duplex and super duplex (Pre Salt alloys) • Product development according to specific needs • Guarantee of quality and supply • Agility • Production capacity • Auto sufficient in liners ✓ LUPATECH C#17Competitive Advantages Management with large experience in the sector ► Credibility in the sector Brazil - "The new O&G frontier": Strong sector growth in Brazil, with deep water expansion Industrial growth due to stable economy Track record of successful acquisitions over the last years Expertise in strategic Diversification of services through acquisitions acquired business, with efficient integration Experienced Management High Sector Growth LUPATECH Distinguished Technology Leadership in valves, anchoring ropes and coating Distinct position in the valve, anchoring rope and coating markets, benefiting from the growing investments in the oil & gas sector Solution Provider in the Energy Segment Focus in technology, with significant efforts in R&D "Level A" supplier of Petrobras Products certified by international agencies Growth opportunities in different niches Integrated services and not only manufacturing C LUPATECH#18Sector Overview Opportunities in Brazil ✓ LUPATECH O#19Timing of the Sector: Concentration in Exploration in the last 5 years E&P timing breakdown per Round Bid - Brazil Higher Development Activities Ahead Total Granted Area (offshore) 232.7 thousand km² - 59.6% already explored Last Next 5 yrs 5 yrs 10th - 2008 1st 7 5 22 9th - 2007 7 5 22 22 8th - 2006 8 8 5 8 5 10 5 222 7th - 2005 2nd 22 22 6th - 2004 23 23 5th-2003 8 5 23 4th - 2002 9 5 22 22 9 5 9 5 9 5 16 3rd-2001 22 22 2nd-2000 222 22 1st - 1999 1999 2004 2009 2014 2019 2024 2029 2034 2039 2044 1998 ■ Exploration ■Development ■ Production Source: ANP and Company's assumptions 3rd 4th 5th 6th 9th 8th 7th 2000 2002 2004 2006 2008 Obs.: 10th equals to zero C LUPATECH#20O&G Investment Cycle and Lupatech's Exposure UPSTREAM MID & DOWNSTREAM Exploration Development Production Refining Distribution Pre Salt & OGX Campos Basin, Tupi & OSX Campos Basin and Northeast New PBR Refineries & Revamps Others Special Services Lease Special Equipments Services: EPCs Equipments: Infrastructure Services: Maintenance Equipments: Replacement Revamps Services: Equipments: Maintenance Replacement EPCs Revamps Services: Maintenance EPCs Equipments: Replacement Exposure LUPA Yes No Ex. Anchoring Ropes, Valves, Completion Tools, Sensors, Coatings Anchoring Oil Well Services Ropes, Valves, Completion Coatings Tools, Sensors, Valves Compressors Valves Compressors C ✓ LUPATECH#21Oil & Gas Industry in Brazil: significant investments expected Petrobras Production Target 4.9% CAGR 5,382 7.1% CAGR 203 1,109 3,907 128 176 9.4% CAGR 623 1,809 2,037 2,020 2,217 2,298 2,301 2,400 2,525 2,723 07 93 146 100 101 110 141 96 384 124 94 142 126 316 163 321 161 277 273 168 274 251 265 1,500 1,540 1,493 1,684 1,778 1,792 1,855 3,950 2,980 1,971 2,100 T 2002 2003 2004 T T 2005 2006 2007 2008 2009 Gas Production in Brazil Oil Production in Brazil Brazil Production Target* 4,283 59 621 623 6,719 7.8% CAGR 174 1,486 ☐ 1,109 2010 International Oil Production 2014 2020 International Gas Production Petrobras targets to increase crude oil and natural gas production by 97.6% from 2010 to 2020 US$224 billion in investments from Petrobras expected between 2010 to 2014 Important opportunities in addition to Petrobras: OGX, OSX, Shell, BP, Total, Queiroz Galvão, HRT, etc. Local Content 2,980 3,950 2014 2020 PBR Oil PBR Gas ■OGX Oil OGX Gas Source: Petrobras and analysts estimates *Only domestic production ✓ LUPATECH#22Oil & Gas Industry in Brazil: Petrobras investments Critical Resources for PBR PBR Capex (US$ bi) Business Segment Accumulated Figures (to be contracted) Dec/10 2013 2015 2020 CAGR 44.1% 1% 2% -1% 2%- 8% Drilling Rigs (depth > 2,000m) 14 26 31 53 Shuttle and Special Vessels 298 465 491 504 224 -53% 33% 174 Platforms (FPSO and SS) 47 53 63 84 112 87 52 Others (Jack up and TLWP) 79 81 83 85 ■ E&P G&E ■ RTC Distribution ■ Corporate ■ Petrochemical Biofuels 06-10 07-11 08-12 09-13 10-14 ◉ ☐ Exploration and production infrastructure required in recently discovered oil & gas fields Production platforms to double in 10 years - higher installed base (maintenance) ■ Large investments in refining capacity Revamping of existing assets ☐ Equipments and services with higher safety requirements and more expensive components Increasing energy infrastructure investments in Brazil will result in unprecedented growth in the demand for equipments and services Source: Petrobras C ✓ LUPATECH#23Development Market: opportunities Development Phase Capex Production Platform Capex 33% 33% 25% 75% 33% Subsea systems Wells Platforms Hull Top side 3% of the total capex of a production platform is spent with the hull and 9% with the topside Source: Market estimates ✓ LUPATECH#24All Relevant Players Raising Equity to Fund Development Projects BR PETROBRAS OGX SBM SOFEC Prosafe OSX An EBX Group Company Oil Majors Engineering, Procurement & Construction ✓ LUPATECH Oil Services & Equipments Suppliers REPSOL Uma empresa do Grupo EBX MODEC JSL JURONG SHIPYARD bluewater The next cycle of CAPEX is to expand O&G production Demand for offshore equipments and services should bring robust level of operations ✓ LUPATECH#25Strategic Planning and LUPATECH Value Creation 列 O#26PEOPLE PROCESSES CLIENTS FINANCIAL VISION: MISSION: VALUE: To be a sustainable company with global presence, and recognized for its trust relationship and management excellence in the Energy and Industrial sectors. To provide innovative solutions for the Energy and Industrial sectors, creating value for stakeholders. Relationship of Trust | Venture Capacity | Sustainability | Focus on Performance | Superior Governance Integration and Synergies Search a market with higher margins Offer integrated solutions return JL Develop strategic alliances with clients Increase portfolio of products and services Explore commercial synergies/Share market knowledge Develop strategic alliances Explore industrial synergies / physical integration Sustainable Profitable Growth Increase revenues and profitability in a sustainable way Management Excellence Increase the value of the company for shareholders Strengthen credibility to investors Increase penetration and segmentation in national and international markets Strengthen and consolidate corporate image Increase productivity and quality Reduce variable costs throughout Global Sourcing Strengthen management model focus on agility, integration and results Manage assets efficiently, specially working capital Search, attract, develop and retain talents and leadership PEOPLE Engage and inspire people, creating an environment of trust and commitment PEOPLE Strengthen values and beliefs spreading Lupatech's culture of a large company CULTURE AND VALUES Spread the culture of sustainability CULTURE AND VALUES Spread the innovation culture CULTURE AND VALUES#27Capital and Value Creation Shareholder Value (EVA) NOPAT CAPITAL Revenue Growth Operational Margins Assets Efficiency COST of CAPITAL Expectations Volume COGS Fixed Assets Company Strenghs Price SG&A Working Capital External Factors Taxes CASH FLOWS C ✓ LUPATECH#28Decision Matrix - Capital Allocation Strategic Value of the Business Low High Negative Value but Strategic Invest Positive Value and Strategic Invest Keep Negative Value and Not Strategic Positive Value but Not Strategic Exit ROIC WACC Exit ROIC WACC Economic Value LUPATECH#29*R$ million Breakdown - Tenor Backlog Improvement - Long Term Visibility Breakdown - Portfolio 2,165 389 Backlog Trend (July preview) 2,183 1,958 2,289 2,309 2,256 2,185 2,183 808 360 in 12 months over 1 year 448 427 247 272 354 339 389 Products Services May-10 Jun-10 2,384 2,535 2,581 2,610 2,524 2,571 Oct-10 Dec-10 406 Contracts signed after June/2011: ■ 1 year ■ Over 1 year ■ US$36 million in new contracts with SBM, Sofec and Quip: supply of anchoring ropes and/or valves ■ Partnership with Vicinay: first contract in Southeast Asia (Singapore) - Reference list expansion - Asian track record Mar-11 C ✓ LUPATECH Jun-11 Jul-11#30Financial Highlights LUPATECH 列 O#31Financial Highlights - R$ million 173 224 Net Revenues CAGR: +27.5% 387 705 582 555 Gross Profit CAGR: +14.9% 213 141 152 146 91 73 2005 2006 2007 2008* 2009* 2010* 2005 2006 2007 2008* 2009* 2010* *IFRS C LUPATECH 3#32Financial Highlights - R$ million CAGR: +61.3% 63 50 EBITDA CAGR: +6.3% 210 98 77 68 Net Result Exchange Variance and Goodwill Amortization Impact** 22.2 (1.6) (3.5) (57.8) (99.2) 97.9 32 24 15 2005 2006 2007 2008* 2009* 2010* 2005 2006 2007 2008* (24) 2009* 2010* (50) *IFRS **Goodwill Amortization: until 2007 only (BR GAAP) C (73) LUPATECH 3#33Improvements in Cash Flow - R$ million Operating Cash Flow x EBITDA 0.8x 0.1x (0.5)x 0.2x 1.3x 1.8x 63 50 41 5 210 125 Working Capital x Net Revenues 54.7% 53.9% 47.7% 43.0% 42.3% 39.7% 98 97 77 68 551 542 553 582 572 585 47 2005 2006 2007 2008 2009 2010 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 WK (LTM) % WK over Net Revenues (LTM) (51) ■ OCF EBITDA C LUPATECH#34*R$ million Equity to book value Equity 12% Debt 88% Managing a Low WACC with a Geared Capital Structure Capital Structure Debt Structure (1Q11) Total Debt Cash 61 Net Debt Short Term 2012 Short term debt: essentially FINAME and PROGREDIR lines Capital Structure reducing WACC and Debt Structure reducing refinancing risks 1,143 1,083 180 2013 2014 C LUPATECH 157 15 31 47 2015 Short Term Long Term 2016 2017 2018 117 117 51 428 Perpetual Convertible Debentures Perpetual Bonds#35IR Contacts: Alexandre Monteiro CEO & IRO Cynthia Burin IR Manager [email protected] www.lupatech.com.br/ir Telephone: +55 (11) 2134-7000 Follow us on twitter www.twitter.com/LUPA3 (Portuguese) www.twitter.com/LupatechSA (English) ✓ LUPATECH